Due to the economic developments, many foreign firms in Turkey are confronted with challenges in the area of personnel recruitment. In a very short period a large number of applications must be viewed and evaluated. Firms that are not well known in Turkey must also develop a positive corporate image in order to be recognized as a potential employer. Foreign companies compete with other foreign companies as well as with local Turkish companies for the most qualified people who are often offered a number of jobs by different employers. Consequently, foreign firms are forced to invest heavily in personnel development to reduce qualification gaps and to increase the spectrum of employee assignment.
Along with personnel recruitment and development, personnel retention poses another challenge for foreign firms in Turkey: The challenge is not only to get the people in but to keep them in. Both foreign and local companies struggle equally with high rates of attrition. Firms operating in Turkey should expect attrition rates of 10-15%, because white collar Turkish employees are enthusiastic and career oriented. At the lower and mid level, we expect higher attrition rates. The company that has the better retention strategy will win” (Frauenheim, 2006: 6).
For a long time, the Human Resources literature was dominated by an ‘outside-in’ perspective. External factors such as the labor market, the competition within the industry or national culture were argued to 6 influence the use of HR practices (e.g. Huselid, Jackson & Schuler, 1997; Brewster, 2004). Where as the Resource Based View (RBV) opposes this idea. The core assumption is that the success of a firm is decisively determined by its specific and unique potential. Thus, internal resources instead of external conditions are regarded as key factors of a firm’s performance and success. According to the Resource Based View , human resources are an important source of sustainable competitive advantage which contribute to the success of a firm (Saá- Pérez & García-Falcón, 2002; Wright, Dunford & Snell, 2001).
According to Barney (1991), to obtain competitive advantage a resource must be (1) valuable in the sense of being profitable for the firm, (2) rare among a firm’s potential and current competitors, (3) imperfectly imitable, and (4) non-substitutable. Other authors like Lepak & Snell (1999) and Hoopes, Madsen & Walker (2003) claim that of these characteristics only value and inimitability are crucial and argue “that rareness is important only if a resource is valuable and exists only if the resource cannot be imitated by competitors” (Hoopes, Madsen & Walker, 2003: 890). Following this view, value, inimitability and uniqueness (firm-specificity) will be referred to as main characteristics of human resources which lead to competitive advantage. Thus, firms can attain sustainable competitive advantage in the field of HR when they (1) possess a valuable and unique workforce that differs from that of their competitors, and (2) apply HR practices which are imperfectly imitable for competitors. Value refers to the workforce and is based on the strategic advantage of minor task-specificity. Employees with broad qualifications can take up different tasks and “enable a firm to conceive of or implement strategies that improve its efficiency and effectiveness” (Barney, 1991: 106). Hence a workforce with broad knowledge and skills is more valuable for a firm than employees with narrow qualifications.
Uniqueness – based on firm-specificity – implies that the workforce has firm-specific capabilities that can be best seized in the context of a particular firm. Firm specificity makes employees less mobile since a change of the employer would mean a decrease in value for the employee and the firm and is thus less likely to happen: “As human capital becomes more idiosyncratic to a particular firm, 7 externalization may prove infeasible and/or incur excessive costs” (Lepak & Snell, 1999: 36). Additionally, a firm-specific workforce is socially embedded in the firm and less prone to favor other employers. Hence, the firm-specificity of employees has a positive impact on attrition. Imperfect imitability is the third pillar of sustainable competitive advantage. Processes need to be developed in such a way that they are too complex for competitors to be imitated. Three ways of creating barriers for imitation are mentioned in the RBV literature. (1) Unique timing and learning means that “valuable specialized resources (…) are developed over time through opportunities that do not repeat themselves” (Boxall & Purcell, 2003: 76). (2) Social complexity may be defined as patterns of teamwork and coordination and is “the prime reason, why firms in some sectors sometimes try to recruit an entire team of employees” (Boxall & Purcell, 2003: 77). (3) Causal ambiguity exists “when the link between the resources controlled by a firm and a firm’s sustained competitive advantage is not understood or understood only very imperfectly” (Barney, 1991: 108). Value, uniqueness and inimitability are argued to enhance HR efficiency.
In Turkey – like in most other countries – it is not only important to recruit qualified employees but also to retain them. High attrition rates in foreign firms can be reduced by individual performance evaluation and reward systems. Since the loyalty could be low, attrition can be reduced by individual performance evaluation and reward systems. Moreover, idiosyncratic jobs which may be individually designed by the employees to fit their specific qualifications and motivations are feasible, too.
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